Conversion to a bi-weekly pay cycle for hourly paid employees frequently asked questions (FAQ)

Transcription

1 Conversion to a bi-weekly pay cycle for hourly paid employees frequently asked questions (FAQ) 1. What do you mean by the introduction of a bi-weekly pay cycle? It means that as of January 1, 2014, you will be paid every 2 weeks instead of twice a month, as is currently the case. There will also be a delay of 12 calendar days between the end of a work period and the pay date. This delay is required in order to process your paycheck based on the actual number of hours worked and to transfer the payment to your financial institution. 2. Why is this change taking place? McGill University currently administers multiple pay cycles (weekly, bi-weekly and semi-monthly) with different pay periods and pay dates for different employee groups. In order to ease the administration of payroll, the University is in the process of converting to a bi-weekly pay frequency cycle for most McGill employees. Surveys conducted by the Canadian Payroll Association show that 62% of organizations process their payroll on a bi-weekly basis. McGill decision to change its payroll frequency is in line with market practice. 3. How will this change occur? The conversion from the current pay cycle to a bi-weekly pay cycle takes into consideration the current pay cycle used for each employee group. You will find detailed information pertaining to your pay conversion in the memo you received with this guide. This memo explains the process, the key dates and other information specific to your employee group.

2 4. What are the advantages of converting to a bi-weekly pay? This change in your pay cycle will result in greater clarity in the number of hours paid for hours worked in each paycheck, based on your collective agreement. This change may also help you to better plan your personal finances since you will always be paid every second Thursday. Therefore, you will no longer face certain months where there is a three-weekend spread between pays. Twice a year, you will receive three paychecks in a month instead of two. 5. How much time is the conversion to bi-weekly pay frequency expected to take? All conversions will occur in January However, the repayment of an advance made to most hourly employees on January 16, 2014 will be deducted from paychecks between April 10 and December 31, When can I expect to receive a regular paycheck? You should receive your first regular paycheck in January You should consult the memo you have received which describes the bi-weekly pay cycle that corresponds to your employee group for the exact date. 7. Was this change in pay frequency discussed with the unions? McGill held discussion meetings with executives of all employee groups to explain the rationale for the change in pay cycle and how the conversion would occur. 8. Do I have a say in this matter if I do not wish to convert to bi-weekly payments? The conversion to the bi-weekly pay schedule applies to most McGill employees. There is no option to remain on the current payroll schedule, which will be abolished as of December 31, 2013.

3 9. How can I best review all the deductions from my paycheck with this change in payroll cycle? You can still access your pay stub by signing in to Minerva Will the University notify my financial institution of this change in view of pre-authorized payments? You are personally responsible to notify your financial institution of any changes in pay dates and to ensure there are funds in your account to allow for preauthorized payments and other regular transactions. The checklist in this reference guide is a reminder of these types of payments. You may use the sample memo at the end of this guide to inform your financial institution of the change. 11. What paperwork is required to support the new bank deposit in my bank account? Your pay will continue to be deposited in your bank account as it is now, but on different dates as it will be deposited every second week. Any paperwork required to modify scheduled pre-authorized payments or withdrawals, if any, will be dictated by your financial institution, which is why it is important to inform them of the change. 12. How can I be sure all my working days will be paid with this conversion? Your December 31, 2013 paycheck will cover all your regular hours of work until December 31, You can refer to the pay calendars sent to you to view the pay periods and dates of payments in 2014 and What is a pay period and what is a lag? A pay period is the pre-determined period of time during which an employee normally works. A bi-weekly pay period equals a 2-week period (10 working days). There is a lag or delay in receiving your pay after the end of the pay period, because of the time required to process the payroll, including the time it takes

4 financial institutions to make the transfer to your bank account. In your case, there will be a lag of 12 calendar days between the end of a pay period on a Saturday and the actual pay date on the first Thursday pay date following the end of that pay period. Please refer to the 2014 and 2015 calendars provided to you for more details on pay periods and pay dates. 14. How will overtime worked in 2014 be paid? All overtime hours worked during a given pay period will be paid along with regular hours worked during that same period. Please refer to the 2014 and 2015 calendars to see the actual pay periods and corresponding pay dates. 15. What about overtime worked in 2013? Any outstanding overtime hours worked in 2013 and unpaid at the end of 2013 will be paid in January How will this affect my benefits and pension? There will be no change to any of your benefits and pension. 17. What will happen if I am on long-term disability or unpaid leave? If you are on long term disability or any other unpaid leaves and currently have deductions taken from your bank account such as insurance premiums, these deductions will be taken on a bi-weekly basis, in line with the new payroll schedule. 18. What will happen to an employee who is on short-term disability leave? Employees on short-term disability leave will be converted to the bi-weekly pay cycle. 19. How will deductions be made? All deductions, including parking fee, Centraide contributions, insurance premiums, or similar deductions will be spread over 26 pays instead of 24 pays. The total annual deduction will not change.

5 20. Why is McGill offering an advance to MUNACA/PSAC and AMURE/PSAC members? As a member of these two groups, you will receive your first bi-weekly pay on January 16, covering only three working days from January 1 to January 4. On the same date, you will receive an advance to cover the gap of the seven missing days payable only on January 30. The advance will provide some financial coverage until the first full paycheck on January What will be the amount of the advance? If you are a MUNACA/PSAC member, the amount of the advance will be based on your level of position and your step reached in the scale of hourly rates. If you are an AMURE/PSAC member, it will be based on your deemed annualized salary rate. The following tables show the applicable amount of advance for a full-time employee who is a member of MUNACA/PSA or AMURE/PSAC. The amount will be prorated on hours worked, if you are a part-time employee. To check your level and step, go to Minerva Job Summary and click on your current job title. For MUNACA/PSAC members Amount of advance for fulltime employee Steps 1 to 7 Steps 8 to 14 Steps 15 to 22 Levels 1 to 5 $600 $700 $ 800 Levels 6 to 10 $700 $800 $ 900 Levels 11 to 15 $800 $900 $1,000 For AMURE/PSAC members Annualized salary Amount of advance: Less than $40,000 $ 600 More than $40,000 but less than $50,000 $ 700

6 More than $50,000 but less than $60,000 $ 800 More than $60,000 but less than $70,000 $ 900 More than $70,000 $1, How will I repay this advance? A set amount equal to 1/20th of the advance will be deducted from your pay for 20 pay periods in 2014, starting on April 10, For example, if your advance is $600, you will reimburse $30 per pay until December 31, Do I have a choice whether to receive the advance or not? The advance will be offered to all members of MUNACA/PSAC and AMURE/PSAC. If you do not wish to receive an interest-free advance and gradually reimburse it through 20 payroll deductions, you MUST decline the payment of the advance by sending an to Totalcomp.hr@mcgill.ca before December 15, Will I be charged interest in repaying the advance? No, you will not pay any interest on this advance. 25. Will the repayment occur through payroll deductions? Yes. A set amount in repayment will be deducted from the 20 pays starting with the April 10, 2014 pay until December 31, Can I decide the amount of repayments I wish to make? No. A set amount, equal to 1/20th of the advance received on January 16, will be deducted from your regular pay on every bi-weekly paycheck received between April 10 and December 31, What happens if I leave or retire from the University and the advance has not been fully paid? If you terminate for any reason or retire in 2014, the remaining amount to be reimbursed will be deducted from the amounts of pay or vacation due to you upon termination or retirement.

7 28. What happens if I take an unpaid leave? The remaining amount of the advance to be reimbursed will be deducted from the amounts of pay or vacation due upon leaving. 29. Apart from the advance, will there be any other special adjustments occurring on the first pay check on January 16, 2014? Yes, since you would have in fact paid all premiums for health, dental, long term disability and optional life insurance coverage until the end of December 31, 2013, the University has decided to waive for you the payment of the insurance premiums on the first paycheck of January which covers only three working days. Regular insurance premium deductions will start on the January 30 paycheck. Your insurance coverage for the first pay period of 2014 will be maintained even if McGill has decided to waive the payment of the premiums for the period from January 1st to 4th. 30. What happens with my unpaid hours of work when I terminate employment? Since you will receive your paycheck with a lag between the end of the pay period and the pay date, you will most likely be entitled to at least one last paycheck after your termination (including retirement) date from McGill. 31. Is it true that I will be paying a significant amount of income taxes at the end of the year? Income taxes are based on income earned in a specific pay period. Since the first pay period in 2014 will be for 3 working days only, taxes will be based on the corresponding lower income. Therefore, there is a possibility that you may owe taxes at year-end but each individual s case will be different as we do not know what personal adjustments or deductions are claimed on an employee s tax returns. ****